A policy for the futureOctober 5, 2015
Agustín Mba Okomo, secretary-general of Equatorial Guinea's Ministry of Mines, Industry and Energy (MMIE), speaks to TOGY about the development of the Regulation for National Content, established to clarify the local content responsibilities of international companies and MMIE in the areas of training, employment, corporate social responsibility and enforcement.
The 2006 Hydrocarbons Law contained vague statutes regulating local content. Prior to the 2014 revision of the national content law, we reviewed similar legislation from countries such as Angola and Nigeria, which implemented specific regulations. Our goal was to create a policy customised to Equatorial Guinea’s circumstances.
Foreign companies supported our undertaking. Entities such as US operators Noble Energy and ExxonMobil, together with the director of national content, conducted seminars where domestic firms discussed their selection processes for licensing local services. A common trend seen during these discussions was local companies’ inattention to legal packaging. Some were violating regulations, while others were missing tax ID numbers.
To prosper in the oil and gas market, domestic firms must be consistent with regard to legal and safety regulations. To participate in lucrative contracts, local companies have to meet the minimum safety requirements consistently. In addition to inattention on the legal front, these companies lack financial and English language skills.
LOCAL SUPPORT: The Hydrocarbons Law bolsters local content. The main issues covered by the new regulation are training, employment, social responsibility and enforcement. The law requires companies to present training plans for national employees before operations begin and demands that the MMIE train technicians so they can gain technical and financial skills to assess company operations.
At the start of every year, the MMIE should know which training sessions it will conduct, whether on drilling, perforation, meteorology or measurement tools at oil stations. The ministry must also have established financial support to cover the training.
CUSTOMISED APPROACH: We cannot demand that a certain percentage of Equatoguineans be employed, because each company is unique. The key is diagnosing each entity’s needs and capabilities and matching those requirements with local content. This is very sector dependent, so a one-size-fits-all policy is not feasible.
Under the terms of the new law, we review each company’s budget annually, comparing them to our social requests. Companies comply with their social commitments under the ministry’s supervision and with consultation from the local communities where they operate.
Each company is required to employ a general inspector of national content with whom the MMIE can liaise. While supervision is a critical component of the position, co-operation is the most essential factor. Companies have been eager to co-operate with the ministry to satisfy the needs of the communities in which they operate.
LEVEL THE PLAYING FIELD: These measures are meant to help 100-percent Equatoguinean firms compete with entities that employ the minimum of 35-percent local capital. The latter benefit from the financial muscle external partners provide, so they are rapidly able to compete at the same standards as international companies. Because wholly Equatoguinean companies do not have such partners, the measures implemented by the MMIE are meant to enable them to prosper.
National content is a social mission. It goes hand-in-hand with the health, education, labour ministries and other organisations, as well as the chamber of commerce and the chief executive of entrepreneurial promotion. The MMIE must foster co-operation between the national content managerial system and other ministries and agencies that share the social emphasis.
National content must become a priority. Firms have to understand that following the law is a necessity, not a favour. The legislation has been put in place to benefit industry operators and the community as a whole.
STARTING POINT: The approval of Ministerial Order 1/2014 on September 26, 2014 led to the adoption of the Regulation for National Content, strengthening Chapter 20 of the Hydrocarbons Law. The provision was devised through several rounds of discussions with industry operators with an eye towards improving the law.
The policy is meant to facilitate investment in foreign and local companies, and address the fact that not all industry services can be found in Equatorial Guinea. The MMIE serves as a bridge between domestic companies, the Equatoguinean community and the government.
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